Sunshine on TIFs

DOLTON –Nominee for Illinois Comptroller State Representative David Miller today unveiled a proposal to help taxpayers understand how often-controversial TIF (Tax Increment Financing) districts are being used and what they are costing government. Miller believes TIF money could potentially be used to meet other pressing budget needs.

“The time has come to shine a light on the more than 1,000 TIFs throughout Illinois,” said Miller. “There are millions of dollars at stake, and taxpayers deserve to know whether or not these TIFs are benefiting their community. With more transparency, we can stop TIFs from being unfairly abused to benefit well-connected developers. We can determine if TIF money is better spent elsewhere. We can fight waste, fraud and abuse and restore fiscal responsibility to Illinois.”

Currently, every municipality that has a TIF district must send an annual report to the Illinois Comptroller’s Office after the end of each fiscal year. The Comptroller’s Office stores those reports and lists municipalities that presently have TIF districts.

A TIF is a special tool that a municipality can use to generate money for economic development in a specific geographic area. TIFs allow a municipality to re-invest all new property tax dollars in the neighborhood from which they came.

The Illinois General Assembly passed the Illinois Tax Increment Allocation Redevelopment Act in 1977 with the goal of enabling municipalities to improve blighted areas and kick-start economic growth by creating TIFs. These “new” revenues arise if new development takes place in the TIF district, or if the value of existing properties rises, resulting in higher tax bills. These funds can be spent on public works projects or given as subsidies to encourage private development. TIFs can also make it easier for a city to acquire private property and demolish buildings to make way for new construction.

Chicago currently has 161 TIF districts with approximately $1 billion in property tax dollars sitting in the accounts. In Cook County alone, there are more than 400 TIF Districts.

“While we all support economic development, I understand that taxpayers are concerned that TIFs are diverting away funds that could be better used to improve schools, fight crime, reduce taxes or provide better government services,” said Miller. “Many municipalities have severe budget constraints – revenue is short and vital services are being cut. Taxpayers need to examine whether or not TIF funds could be better used. This is the fiscally responsible approach.”

Miller proposes to add a new online TIF database to the Illinois State Comptroller’s website. The public-friendly database would include detailed information and analysis on every TIF in Illinois, including account balances, economic information and campaign contributions from developers involved in each TIF.

Miller also proposes that the Illinois General Assembly work with the Illinois Department of Revenue to create fiscal notes when a TIF is renewed. Miller feels that knowing the financial picture of a TIF prior to renewal is an excellent opportunity to evaluate if its original purpose is being met. “Recent proposals to use unused TIF dollars to address budget problems should be considered. The first step towards fiscal responsibility is transparency.”

Taxpayers have justifiable concerns that TIFs are being abused to enrich developers in areas that are not impoverished. The connection between campaign contributions from wealthy developers and the creation of TIF districts is also a major concern. “To prevent pay-to-play politics and developer abuse, the public should be able to have easy access to the financial information in each of the TIF accounts that exist in communities throughout this state,” Miller stated.

“Transparency in TIFs fits within my overall agenda as Comptroller – increasing the openness of government in order to benefit the taxpayers,” said Miller. “The more information taxpayers have, the better their ability to hold politicians, developers and campaign contributors accountable. TIF transparency is key to fiscal responsibility in our state. In these belt tightening times, everything needs to be on the table. We must improve TIF oversight.”